Fundamentals of Foreign Trade and Documentation MCQ Questions and Answers Part – 1

Fundamentals of Foreign Trade and Documentation MCQ Questions and Answers Part – 1

Fundamentals of Foreign Trade and Documentation MCQ Questions and Answers Part – 2

Fundamentals of Foreign Trade and Documentation MCQ Questions and Answers Part – 3

1. Which one of the following is not a commodity board
A. Coir Board
B. Rubber Board
C. Coffee Board
D. Pepper Board
ANSWER: D
2. Collusions can be created through——-.
A. global business
B. Cartels
C. transnational business
D. agreements
ANSWER: B
3. A licensing agreements with mutual exchange of patents is known as——-
A. cross licensing
B. flat licensing
C. product licensing
D. trade licensing
ANSWER: A
4. Free international trade maximizes world output through______________.
A. Countries specializing in production of goods they are best suited for
B. reduction in taxes
C. increased factor income
D. encouraging competition
ANSWER: A
5. International business does not result in the following is______________.
A. innovation is encouraged
B. international cooperation is encouraged
C. imports are rendered cheap
D. consumption is minimized
ANSWER: D
6. By entering into international business a firm expects improvement in______________.
A. Marketing
B. All spheres of Marketing,Operation and finance simultaneously
C. any or all spheres of marketing,Operation and financeD. finance only
ANSWER: D
7. By having business in different Countries a firm reduces___________.
A. Credit risk
B. Political risk
C. Financial risk
D. business risk
ANSWER: B
8. Wholly owned Subsidiary can be set up______________.
A. as a Greenfield venture
B. to acquire an existing firm.
C. to have products marketed overseas
D. to have management is overseas
ANSWER: A
9. Countries/regions with huge market size will attract_____________.
A. Market seeking FDI
B. Efficiency seeking FDI
C. Vertical FDI
D. Created assets seeking FDI
ANSWER: A
10. In a business cycle,the phase preceeding prosperity is_____________.
A. recession
B. depression
C. recovery
D. recession or depression
ANSWER: C
11. The following factors are key drivers of globalisation_________________.
A. Government action,exchange rates,competition and socio demographic factors.
B. Market Convergence,Competition,exchange rates and cost advantages
C. Cost advantages,government action,economic cycles and Competition
D. Market,Cost,Competition and government policies.
ANSWER: D
12. Buyers can exercise high bargaining power over their suppliers if_________________.
A. The volume they buy accounts for a large percentage of their Suppliers sales.
B. There are few buyers in the market
C. They have many suppliers to choose from
D. There is a high concentration of suppliers
ANSWER: A
13. Assessment of Competitive rivalry does NOT include an understanding of_________.
A. The extent to which Competitors are in balance.
B. Market growth rates
C. Fixed costs,exit barriers and operational efficiency.
D. The management structure of an organisation.
ANSWER: D
14. Which of the following represent major reactive motives for initiating export is______________.
A. ended sales of Seasonal products
B. Competitive pressures
C. overproduction/excess capacity and unsolicited foreign orders.
D. all of the above
ANSWER: D
15. In which way do Japanese firms typically exploit foreign market opportunities?
A. using perceived value pricing strategies.
B. using psychological pricing strategies.
C. using penetration pricing strategies
D. through mass communication where their strengths in technological innovations are emphasized.
ANSWER: C
16. Which of the following is not a common form of tariffs?
A. Ad-valorem
B. discriminatory
C. specific
D. quota
ANSWER: B
17. Among the factors that affect the balance of trade figures are________________.
A. exchange rates,taxes,tariffs and trade measures.
B. the business cycle at home or abroad
C. trade barriers and agreements
D. non tariff barriers
ANSWER: A
18. Export control refers to restrictions on ______________.
A. Domestic firms from engaging in exports
B. Items that can be exported from the country
C. Foreign countries exporting to the country.
D. Domestic firms engaging in trade with nation.
ANSWER: B
19. Indirect regulations affecting international business does not include______________.
A. Export licensing
B. Anti-boycott regulations
C. Antitrust laws
D. Anti-corruption laws.
ANSWER: A
20. Anti-boycott regulations provide that_______________.
A. Domestic Companies should not boycott any export order.
B. Foreign companies should not boycott exports from the country.
C. Domestic companies should not comply with boycott regulations imposed by the importing country.
D. Trade should be liberal as provided under WTO charter.
ANSWER: C
21. The operating risk in the host country does not include the risk of______________.
A. Change in government policies
B. Exchange control
C. Price Control
D. Sanctions
ANSWER: D22. The political risk faced by a firm cannot be managed by________________.
A. following ethical business practices
B. partnership with local firms
C. insurance
D. none of the above
ANSWER: D
23. Voluntary export restraint is________________.
A. Tariff barrier
B. Non-tariff barrier
C. Both tariff and non tariff barrier.
D. Not a trade barrier.
ANSWER: B
24. The objectives of import duty is/are________________.
A. To raise income for the government.
B. To restrict imports.
C. To encourage exports.
D. To raise income and restrict imports.
ANSWER: D
25. Import tariff benefits_______________.
A. the consumers
B. domestic producers
C. overseas suppliers
D. the overseas producers
ANSWER: B
26. Non tariff trade barriers include________________.
A. administrative regulations
B. quota
C. fiscal barriers
D. All of the Above
ANSWER: D
27. The following is not a feature of globalisation is___________.
A. Similar strategies are adopted by a firm in all markets.
B. Only multinational firms engage in international business.
C. Convergence of ideas and culture
D. Obliteration of national boundaries.
ANSWER: A
28. Globalisation of markets has brought about economies of________________.
A. Scale in production
B. distribution and marketing
C. management
D. all business operations
ANSWER: D
29. Outsourcing of components is an example of globalisation of_____________.
A. Production
B. Marketing
C. Purchase
D. Production and Marketing
ANSWER: A
30. To assess the potential of international markets Organisations generally compare nations with respect to______________.
A. Political regime
B. demographics,GNP/Capita and Consumer preferences
C. Consumer Preferences
D. demographics,GNP/capita
ANSWER: B
31. A multinational Corporation (MNC) is defined by_______________.
A. Carrying out production in more than one country
B. having sales in more than one country
C. having a multi ethnic Workforce
D. having suppliers in more than one country
ANSWER: A
32. MFN is an acronym of________________.
A. Most Favourable Nations
B. Most Favoured Nations
C. Most Fortune Nations
D. Most Fastest Nations
ANSWER: B
33. The law that prevents the practices in restraint of trade is______________.
A. Antiboycott regulations
B. Antitrust Laws
C. Antibribery Regulations
D. Anticorruption regulations
ANSWER: A
34. The focus on increasing profitability and profit growth by reaping the cost reduction that come from
economies of Scale is___________.
A. Global Standardisation Strategy
B. Localisation Strategy
C. Transnational Strategy
D. International Strategy
ANSWER: A
35. The focus on increasing profitability by customising the firms goods or services providing good match to
taste and preferences in different national markets is_________________.
A. Gobal standardization strategy
B. Localisation Strategy
C. Transnational Strategy
D. International Strategy
ANSWER: B
36. Who is the minister of commerce and industry in India
A. Mr.Suresh Babu
B. Mrs.Nimala Sitharaman
C. Mr.Arun jately
D. Mr.Rajnath Singh
ANSWER: A37. The Strategy of taking the products first produced for their domestic market and selling them
internationally with only minimal local customization is________________.
A. Global Standardisation Strategy
B. Localisation Strategy
C. Transnational Strategy
D. International Strategy
ANSWER: D
38. An agreement whereby a person grants the other the rights to intangible property for a specified period for
a return of royalty is_________________.
A. franchising.
B. licensing.
C. joint venture.
D. strategic alliances.
ANSWER: B
39. The agreement in which a firm not only sells intangible property to an entity but also insist on the strict
rules as to how it does business is_________.
A. franchising.
B. licensing.
C. joint venture.
D. strategic alliances.
ANSWER: A
40. A entitlement establishing a firm that is jointly owned by two or more otherwise independent firms
is______.
A. franchising.
B. licensing.
C. joint venture.
D. strategic alliances.
ANSWER: C
41. The cooperative agreement between potential or actual competitors is_____.
A. franchising.
B. licensing.
C. joint venture.
D. strategic alliances.
ANSWER: D
42. The entry mode that allow firms to export their process know- how to countries where FDI is prohibited,
thereby enabling the firm earn greater return from this assets is_________.
A. licensing.
B. consultancy exports.
C. project exports..
D. turnkey projects.
ANSWER: D
43. The leading continent in international trade in IT products is _______.
A. Asia.
B. Europe.
C. America.
D. Africa.
ANSWER: A44. The new economic policy has components_______________.
A. Liberalization.
B. Privatization.
C. Globalization.
D. LPG.
ANSWER: D
45. A mixed economy is necessarily a_______.
A. controlled.
B. planned.
C. organized.
D. planned, organized and controlled.
ANSWER: B
46. The economic growth rate of a nation is not affected by__________.
A. business cycle.
B. sporadic events.
C. government policies.
D. none of the above.
ANSWER: D
47. A successful business must meet its_________________.
A. economic objectives .
B. social objectives.
C. economic and social objectives.
D. top executives expectations.
ANSWER: C
48. Economic growth can be measured by__________.
A. CPI .
B. CBI .
C. GDP.
D. MPC.
ANSWER: C
49. In a boom______________.
A. unemployment is likely to fall .
B. prices are likely to fall .
C. demand is likely to fall.
D. imports are likely to grow.
ANSWER: A
50. In a recession, GDP__________.
A. grows negatively .
B. grows slowly .
C. grows by 0%.
D. grows rapidly.
ANSWER: A

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Author and Assistant Professor in Finance, Ardent fan of Arsenal FC. Always believe "The only good is knowledge and the only evil is ignorance - Socrates"
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